report 


JO  j 


c  \  a» 


OF 


HON.  J.  G.  CANNON 


OF  ILLINOIS, 

FROM  THE 

COMMITTEE  ON  THE  POST-OFFICE  AND  POST-ROADS, 

MADE  TO 

THE  UNITED  STATES  HOUSE  OF  REPRESENTATIVES  MARCH  1,  1878, 

AGAINST 


A  nIDf'x™EP0ETED  BY  THE  majority  of  said  committef  to 

GR  TJrN|.AnS|,l:l-r[DY  AGGEEGATING  *3,130,000  IN  AID  OF  A 
IfJf  ™MSHIPS  FR0M  NEW  YORK  AND  NEW 
ORLEANS  TO  RIO  DE  JANEIRO  IN  BRAZIL 


effect.  It  would  be  awe^Tupo!  legitimate  commeroe  ’|eneflcial  in  its' 

proposition,  in  effect,  to  give  a  bonus to  »S  ,ather  than  a  benefit.  It  is  a 

ships  at  a  price  greater  than  their  value  in  N®ftaln  J’eJsou| to  make  a  sale  of  steara- 

would  be  an  encouragement  the  lobby  markets  of  the  w»rld.  Its  passage 

“of  Intot^theTe^iDmateAr  °f  C°"/r, fcr  ^  *  «• 
indiistry,  and  economy  make  alegitLiie  8  aTemM“  of  trade-  a”d  V  skill, 

‘‘The  keeps  it  in  repair, 

wherever  lie  may  be  upon  the  globe1-  we  should  !  t  !  ^  ProPert.y  ot  the  citizen 

houses  and  improve  our  harbors-  we  should  at .the  general  expense,  build  light- 
nations.  Then  onr  commerce  on  the  ocean  ‘tin??.  c.0T,ufra  al  treaties  with  other 
left  to  private  enterprise.  ’  unfettered  by  legislation,  can  safely  be 

ttabR."i0rity  0f  the  ~ a"d  recom- 
J.  G.  CANNON. 


X>J* 


t, 


Mr.  J.  G.  Cannon,  from  the  Committee  on  the  Post-Office  and  Post- 
Roads,  to  whom  were  referred  bills  II.  R.  Nos.  274, 1123,  2578,  2637,  and 
2734,  and  for  which  a  majority  of  the  committee  report  a  substitute  and 
recommend  its  passage,  dissents  from  the  recommendation  of  the  Major¬ 
ity,  and  asks  leave  to  present  his  views : 

The  substitute  reported  by  the  majority  directs  the  Postmaster-Gen- 
eral  to  establish  two  lines  of  steamships,  one  from  New  York,  and  one 
from  New  Orleans,  via  Galveston,  to  Rio  de  Janeiro,  in  Brazil;  each  to 
run  monthly;  the  Postmaster-General  to  advertise  for  the  service; 
separate  contracts  for  the  two  lines  to  be  made ;  the  maximum  price  for 
the  service  to  be  $30  per  mile  per  annum  for  each  line,  aggregating,  in 
round  numbers,  say  $313,000  per  annum,  and  to  continue  for  ten  years. 
The  steamers  to  be  built  in  the  United  States,  and  to  be  of  not  less  than 
3,000  tons  each. 

In  presenting  my  views  to  the  House  upon  the  legislation  proposed 
by  the  committee,  I  concur  with  the  majority  that  the  same  is  not  im¬ 
portant  primarily  for  the  mail  service,  but  is  recommended  by  the  ma¬ 
jority  for  the  purpose  of  promoting  our  foreign  commerce,  stimulating 
manufactures,  by  finding  a  market  for  the  products  of  the  United  States, 
and  for  the  further  purpose  of  enabling  our  merchant  marine  to  carry  the 
freight  on  the  ocean  now  carried  by  vessels  sailing  under  foreign  flags. 
Therefore  I  shall  discuss  the  proposed  legislation  with  reference  to  the 
effect  it  would  have  upon  these  objects,  dealing  with  facts  rather  than 
theories  ;  and  if  I  shall  contribute  anything  which  will  assist  the  House 
in  ascertaining  the  facts  bearing  upon  these  propositions,  and  in  arriv¬ 
ing  at  a  correct  conclusion  in  their  solution,  I  will  have  accomplished  all 
I  proposed. 

As  the  bill  recommended  is  special  in  its  provisions — for  the  estab¬ 
lishment  of  steamship  lines  between  the  United  States  and  Brazil— I 
will  first  refer  to 


OUR  COMMERCE  WITH  BRAZIL, 

incidentally,  however,  treating  of  the  propriety  of  general  legislation 
touching  the  grant  of  subsidies  for  ocean  steamship  service;  for  the  pro¬ 
posed  legislation,  if  had,  is  only  the  entering- wedge  for  a  number  of 
propositions  to  make  appropriations  from  the  Treasury  in  aid  of  steam¬ 
ship  lines  to  all  parts  of  the  globe. 

Our  imports  from  Brazil  for  six  years — 1860  to  1865,  inclusive— aver¬ 
aged  per  annum  $14,528,533,  while  our  exports  for  the  same  period  aver¬ 
aged  per  annum  $5,713,511,  the  exports  being  over  one-third  of  the 
imports.  During  those  six  years  there  was  no  subsidy  by  our  govern¬ 
ment  to  steam  or  sail  vessels,  and  it  will  be  noticed  that  this  was  during 
the  late  war,  when  one-half  of  the  people  of  the  United  States  were 
not  importing  or  exporting.  Under  act  of  Congress  of  ,  1865, 

aline  of  ocean  steamers,  American  built,  received  a  subsidy  of  $150,000 
per  annum  for  ten  years,  and  made  monthly  trips  between  New  York 
and  Rio  de  Janeiro,  in  Brazil,  from  1866  to  1875,  inclusive. 

The  total  amount  of  the  subsidy  was  a  million  and  a  half.  During 
those  ten  years  we  bought  of  Brazil  merchandise  of  the  average  annual 
value  of  $29,' 463, 405.  Our  purchases  of  Brazil  were  more  than  twice 


2 


OCEAN  MAIL  STEAMSHIP  SERVICE 


\ 


tbe  amount  they  were  annually  for  the  six  years  prior  to  the  subsidy. 
Now,  the  object  of  the  subsidy  was  to  build  up  a  market  in  Brazil  for 
our  surplus  breadstuff's  and  manufactured  articles,  yet  during  the  same 
ten  years  we  sold  to  Brazil  an  annual  average  value  of  only  $6,364,600. 
This  was  in  a  time  of  peace,  when  the  whole  country  was  exporting; 
that  is  to  say,  we  paid  a  million  and  a  half  dollars  subsidy,  and  the  re¬ 
sult  was  we  annually  sold  to  Brazil  for  ten  years  only  $651,089  more 
than  we  did  before,  while  we  bought  of  Brazil  $14,934,872  per  annum 
more  than  formerly.  Such  a  transaction  on  the  part  of  a  private  indi¬ 
vidual  would  end  in  bankruptcy,  and,  if  repeated,  would  warrant  the 
appointment  of  a  conservator  to  take  charge  of  his  estate.  Yet  it  is 
proposed  to  not  only  repeat  the  folly  of  the  former  experiment  but  to 
double  it;  that,  too,  in  light  of  the  fact  that  the  moment  the  United 
States  quit  paying  the  subsidy  the  steamship  line  went  out  of  business. 

Now,  in  the  last  two  years,  without  a  subsidy  and  without  a  steam¬ 
ship  line,  our  average  annual  exports  to  Brazil  were  $7,463,596 ;  in  round 
numbers  $1,100,000  annually  more  than  with  subsidies.  In  the  year 
1877,  while  our  exports  to  Brazil  amounted  to  only  $7,580,813,  yet  we 
carried  in  American  sailing-ships  of  our  exports  and  imports  to  and 
from  that  country  (aggregating  $51,000,000,  as  shown  by  official  state¬ 
ments),  $18,314,430,  which  is  one  and  a  half  times  more  than  our  total 
exports  to  Brazil.  If  we  had  as  good  a  carrying  trade  with  all  other 
nations  in  proportion  to  our  exports  thereto,  our  merchant  marine  would 
be  superior  to  that  of  any  other  nation.  The  carrying  in  American  bot¬ 
toms  between  Brazil  and  countries  other  than  the  United  States  I  have 
no  means  of  ascertaining,  but  am  satisfied  it  was  considerable. 

As  a  matter  of  general  interest,  as  well  as  to  show  the  correctness  of 
above  statements,  I  append  to  this  report  a  table  showing  the  total 
annual  imports  and  exports  between  the  United  States  and  Brazil 
during  the  fiscal  years  ended  June  30,  1860,  to  1877,  inclusive,  prepared 
by  Hon.  Edward  Young,  Chief  of  Bureau  of  Statistics : 

Statement  of  imports  and  exports  from  and  to  Brazil  during  the  fiscal  years  ended  June  30, 

1860,  to  1877,  inclusive. 


Merchandise. 


1860 

1861 

1862 

1863 

1864 

1865 
1=66 

1867 

1868 

1869 

1870 

1871 

1872 

1873 

1874 

1875 

1876 

1877 


Fiscal  years  ended  June  30 — 


Imports. 


Domestic  ex¬ 
ports. 


Foreign  ex¬ 
ports. 


$21, 204,  803 

18. 100,  456 
12,  747,230 
10,  945,  476 
14,  388, 889 

9,  784,  312 
16,  816,  803 

19. 100,  300 

23,  595,  740 

24,  837,  403 
25, 161,  219 
30,  551,  324 
30,  112,  384 
38,  540,  376 
43,  889,  647 

42,  028,  863 
45,  446,  381 

43,  498,  041 


$5, 644,  040 

4,  748,  202 

3,  774,  249 
7, 454,  292 

5,  252,  387 
6, 485,  872 
5,  603,  817 

4,  964,  308 

5,  585,  465 
5,  779,  559 
5,  665,  098 
5,  942, 416 
5, 860,  755 
7,  090,  987 
7,  560,  502 
7,  631,  865 
7,  252,  218 
7,  497,  118 


$281,  089 
192,  754 
65,  647 
185,  879 
102,  368 
94,  289 
88,  042 
135,  079 
109,  839 
77,  245 

109,  225 
71,  317 
60,  592 

106,  735 
141,  654 

110,  494 
94,  162 
83,  695 


Bureau  of  Statistics,  February  11, 1878. 
Hon.  Jos.  G.  Cannon,  M.  C. 


EDWAED  YOUNG, 

Chief  of  Bureau. 


L 


OCEAN  MAIL  STEAMSHIP  SERVICE. 


3 


In  the  year  1877  oar  imports  from  Brazil  were,  free  of  duty,  $40,205,- 
874;  dutiable,  $3,292,167.  Of  this— 


Coffee  amounted  to . .  $36, 022, 525 

India  rnbber .  2, 598, 347 

Hides,  skins,  and  furs  (undressed) . .  .  1, 138, 819 

Sugar . .  3, 156, 108 


From  proof  before  the  committee,  it  appeared  that  when  we  removed 
the  import-tax  on  coffee  the  Brazilian  Government  and  its  provinces 
placed  an  export-tax  upon  that  article  equal  to  the  import-tax  we  re¬ 
moved.  So  we  lost  a  large  revenue  from  that  source,  without  cheapen¬ 
ing  the  price  to  the  consumer.  As  shown  by  the  Commerce  and  Navi¬ 
gation  Report,  our  exports  to  Brazil  for  1877,  of  $7,580,813,  consisted 


in  part  of — 

Flour .  $3,781,008 

Indian  corn . .  1,  772 

Other  breadstuffs .  34, 232 

Common  cotton  goods . .  565, 631 

Codfish .  567,221 

Turpentine . .  30, 189 

Lumber,  boards,  &c .  289, 569 

Oils .  904,129 

Iron,  steel,  and  all  manufactures  of  same .  724, 944 


Notice  flour  was  the  principal  export.  It  was  in  proof  before  the 
committee  that  the  duty  levied  upon  flour  by  the  Brazilian  Government 
and  provinces  was  $2  per  barrel.  We  cannot  hope  to  increase  the  ex¬ 
port  of  thsTt  article  or  other  breadstuffs  permanently  to  any  consider¬ 
able  extent,  it  being  the  policy  of  the  Brazilian  Empire  to  protect  its 
own  producers  of  wheat  and  corn,  for  the  production  of  which  a  part 
of  that  empire  is  admirably  fitted. 

The  empire  of  Brazil  extends  from  5°  10'  north  latitude  to  33°  46'  10" 
south  latitude,  and  from  8°  21'  24"  east  longitude  to  32°  west  longi¬ 
tude  of  Rio  de  Janeiro.  It  has  many  rivers  navigable  by  steamers, 
vast  prairies  and  forests,  exceedingly  fertile  soils,  and  a  variety  ot 
climates,  where  tropical  plants  as  well  as  those  of  temperate  zones  grow 
luxuriantly.  It  has  a  population  of  12,000,000  souls.  It  is  almost 
exclusively  an  agricultural  country. 

I  give  a  few  extracts  from  a  volume  entitled  u  The  Empire  of  Brazil 
at  the  Universal  Exhibition  of  1876  in  Philadelphia,”  furnished  me  in 
response  to  a  request  made  for  certain  information  of  the  Brazilian  min¬ 
ister  : 

The  greater  part  of  the  population  is  employed  in  agriculture,  which  is  the  principal 
source  of  the  national  wealth. 

Nature  appears  to  have  destined  Brazil  to  be  one  of  the  agricultural  countries  of  the 

world. 

Large  expanses  of  its  soil  are  yet  covered  with  majestic  virgin  forests,  and  still  pre¬ 
serve  their  primitive  fertility,  which  largely  and  generously  compensates  labor. 
Wheat  and  rye,  which  in  Europe  produce  20  for  1,  and  in  Asia  from  8  to  12,  in  various 
provinces  yield  from  20  to  60,  and  in  some  places — in  the  province  of  S.  Pedro  do  Rio 
Grande  do  Sul — as  much  as  70  for  1. 

There  are  soils  which,  from  19.36  acres,  yield  any  of  the  following  products  :  cotton, 
from  329  to  918  kilograms  ;  coffee,  688.5  kilograms ;  manioc  or  cassava,  3,636  liters ; 
maize,  1,818  liters. 

Maize,  as  a  rule,  yields  an  average  of  150  for  1.  It  is  not  rare,  however,  to  meet  with 
soils  which  give  from  250  to  300,  and  on  the  island  of  Fernando  de  Noronha  400  for 
have  frequently  been  harvested. 

In  the  province  of  Parang  thirty-six  varieties  of  maize  are  planted. 

#  #  ##*#*# 

Maize  is  largely  cultivated,  especially  in  the  southern  provinces,  where  in  the  shape 
of  bread,  meal,  and  farina  it  constitutes  a  wholesome  and  nutritious  food.  It  comes  to 
market  in  a  variety  of  forms. 


4 


OCEAN  MAIL  STEAMSHIP  SERVICE. 


From  all  which  it  appears  our  market  for  cotton,  corn,  wheat,  and  pro¬ 
visions  will  not  be  found  in  Brazil,  but,  in  the  future  as  in  the  past,  will  be 
found  in  the  old  and  thickly-settled  countries  of  Europe,  which  market, 
amounting  to  many  hundreds  of  millions  annually  (the  great  bulk  of  our 
exports)  I  will  speak  of  further  on  in  this  report.  I  submit,  if  the  people 
of  Brazil  become  valuable  customers  of  the  United  States,  it  must  be  for 
our  manufactured  products  ;  and  before  they  will  become  extensive  pur¬ 
chasers  of  those  articles  two  things  must  occur;  first,  they  must  consume; 
secondly,  we  must  sell  to  them  at  the  same  price  like  articles  can  be  pur¬ 
chased  elsewhere.  And  what  is  true  as  to  Brazil  is  true  as  to  every 
other  country  in  the  world,  and  as  to  all  our  products.  The  cotton- 
grower  of  the  South  must  sell  his  cotton  in  the  markets  of  the  world 
(quality  considered)  as  cheaply  as  it  can  be  furnished  from  India  or  else¬ 
where.  The  agriculturist  of  the  West  must  sell  flour,  wheat,  Indian 
corn,  and  provisions  as  cheaply  as  they  can  be  furnished  from  the  Black 
Sea  provinces,  or  he  will  go  without  a  market.  Commerce  knows  no 
country;  self-interest  prompts  everybody  everywhere  to  buy  in  the 
cheapest  and  sell  in  the  dearest  markets.  If  the  cotton-grower  of  the 
South  or  the  corn-producer  of  the  West  does  not  furnish  his  product  as 
cheaply  as  his  competitor  elsewhere  in  the  world  no  subsidy  to  aid  him 
in  transportation  or  to  compete  with  cheaper  labor  in  foreign  countries 
can  make  him  an  enduring,  profitable  market;  and  so  far  as  a  subsidy 
would  make  him  a  temporary  market,  it  would  be  a  tax  upon  other  indus¬ 
tries  of  the  country,  taking  from  one  industry  which  is  self-supporting 
to  give  to  another  which  is  not.  And  what  is  true  as  to  the  great  sta 
pies  of  the  country  is  true  as  to  the  manufactured  articles  for  which  we 
seek  a  market  in  foreign  countries.  Unless  they  can  be  furnished  by  us 
to  foreign  markets  as  cheaply  as  they  can  be  procured  from  other  sources 
we  caunot  successfully  compete  for  the  trade,  and  if  we  attempt  so  to 
do  by  making  grants  from  the  Treasury  to  steamship  lines  to  carry  such 
products,  the  steamships  will  run  if  we  grant  them  sufficient  subsidies 
only  so  long  as  the  same  are  continued ;  and  as  in  the  past,  when  the 
subsidy  ceases  the  steamship-line  will  cease  to  be  operated. 

As  I  recollect,  most  of  the  gentlemen  who  appeared  before  the  com¬ 
mittee  favoring  the  subsidy  stated  that  the  manufacturers  of  cheap 
cotton  goods  in  the  United  States  are  underselling  the  English  manu¬ 
facturers.  We  exported  last  3rear  from  the  United  States  to  Great  Brit¬ 
ain  cheap  cottons  to  the  value  of  two  millions  of  dollars,  and  to  Brazil 
to  the  value  of  over  five  hundred  thousand  dollars.  These  facts  show 
that  whenever  we  have  anything  to  sell  which  is  cheap  it  will  find  a 
market,  for  that  matter,  in  Brazil,  although  there  is  no  subsidized  line 
of  steamers  to  that  coantry. 

Labor  in  the  United  States,  by  protection  or  otherwise,  engaged  iu 
producing,  is  better  compensated  than  in  Great  Britain,  France,  and 
most  other  countries.  I  refer  to  the  compensation  of  labor  in  the 
United  States  as  a  fact  bearing  upon  our  ability  to  sell  manufactured 
articles  in  foreign  countries.  We  are  supreme  within  our  own  bounda¬ 
ries.  We  can  prohibit  the  importation  of  goods  manufactured  abroad, 
or  levy  such  duties  upon  them  as,  in  addition  to  their  cost,  will  enable 
our  manufacturers  to  receive  for  like  goods  made  and  sold  in  this  coun¬ 
try  a  sum  equal  to  the  cost  of  similar  articles  abroad  with  the  freight, 
commission,  and  tax  on  importation  added.  But  we  cannot  prohibit- 
competition  outside  our  borders.  The  only  way  we  can  take  our  higher- 
priced  goods  and  sell  them  abroad,  and  compete  with  the  cheaper  labor 
of  other  countries  engaged  in  manufacturing  like  articles,  is  not  to  sub¬ 
sidize  steamship  lines  only  to  carry  the  goods  (we  tried  that,  as  before 


OCEAN  MAIL  STEAMSHIP  SERVICE. 


5 


shown,  for  ten  years  to  Brazil  and  failed),  but,  in  addition,  to  appropri¬ 
ate  sufficient  money  from  the  Treasury  to  make  up  the  loss  the  dealer 
sustains  when  he  comes  to  dispose  of  his  wares,  bought  in  the  United 
States,  in  competition  with  other  dealers  who  bought  the  same  articles 
abroad  for  less  money — a  proposition  to  extend  protection  to  a  degree 
that  no  saue  man  ought  to  advocate,  or  advocating,  if  he  presents  the 
question  fairly,  would  have  no  prospect  of  success. 

OCEAN  TRANSPORTATION  AND  ITS  EFFECT  ON  EXPORTATION. 

To  show  that  the  question  as  to  who  carries  the  goods  on  the  ocean, 
i.  e .,  whether  under  an  American  or  foreign  flag,  has  but  little  effect  on 
the  amount  of  the  products  we  actually  sell  abroad,  I  refer  to  our  trade 
with  Cuba,  lying  as  it  does  right  at  our  doors,  with  lines  of  mail-steam 
ers  plying  between  New  York,  New  Orleans,  and  Havana,  and  with  a 
great  many  sailing  vessels  in  the  same  trade.  The  Commerce  and  Nav¬ 
igation  Beport  shows  that  we  imported  from  that  island  last  year  mer¬ 
chandise  to  the  value  of  $65,828,395,  while  our  domestic  exports  to  Cuba 
were  only  $12,709,000,  our  sales  being  less  than  one-fifth  of  our  pur¬ 
chases.  Yet  of  the  total  $78,500,000  carried,  $65,446,433  was  carried 
in  American  vessels.  Notice  that  our  exports  to  Cuba  are  no  larger 
than  our  exports  to  Brazil  in  proportion  to  the  imports  from  the  two 
countries,  respectively. 

Whatever  theories  may  be  advanced  as  to  proper  legislation,  experi¬ 
ence  and  practical  results  after  all  are  the  best  guides.  I  therefore  call 
attention  to  the  effect  of  the  subsidy  to  the  Pacific  Mail  Company  in 
aid  of  commerce  between  San  Francisco  and  China.  The  Congress  of 
the  United  States  in  1865,  to  encourage  this  trade,  granted  a  subsidy 
for  establishing  a  steamship  line,  thereby  hoping  to  find  a  market 
in  China  and  Japan  for  our  products.  China  especially — China,  that 
wonderful  and  enduring  empire  of  pre  historic  origin,  w7ith  its  swarm 
of  four  hundred  millions  of  inhabitants — was  to  be  made  tributary 
to  our  commerce  and  to  consume  our  products;  and  all  this  through 
the  establishment  of  a  line  of  steamers,  to  run  monthly  from  San  Fran¬ 
cisco  to  that  empire  by  the  way  of  Japan.  So  a  grant  wras  made  from 
the  Treasury  of  $500,000  a  year  for  ten  years,  aggregating  $5,000,000. 
The  service  commenced  in  1866.  The  steamers  were  built  in  the  United 
States  under  the  provisions  of  the  law,  although  the  cost  was  at  least 
25  per  cent,  greater  than  they  could  be  built  for  elsewhere.  Now  let  us 
note  the  result.  I  give  a  statement  made  by  the  Chief  of  the  Bureau 
of  Statistics,  showing  our  imports  from  and  exports  to  China,  Hong- 
Kong,  and  Japan  (merchandise  only),  during  the  fiscal  years  ended  June 
30,  1856  to  1877,  inclusive,  as  follows: 

H.  Bep.  346 - 2 


OCEAN  MAIL  STEAMSHIP  SERVICE. 


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OCEAN  MAIL  STEAMSHIP  SERVICE. 


7 


From  which  it  appears  that  oar  total  imports  from  China  and  Houg- 
Kong,  for  the  eleven  years,  1856  to  1866,  inclusive,  were  $103,357,620; 
while  for  the  eleven  years,  1867  to  1877,  inclusive,  they  were 
$183,691,940,  showing  an  increase  of  our  purchases  from  China  and 
Hong-Kong,  for  the  last  eleven  years,  of  $75,337,330.  That  is  a  preiw 
good  showing  for  China.  Now  let  us  look  at  the  showing  for  the  United 
States.  For  the  eleven  years,  1856  to  1866,  inclusive,  we  sold  of  mer¬ 
chandise  to  China  and  Hong-Kong,  $35,735,673,  while  for  the  eleven 
years,  1867  to  1877,  inclusive,  we  exported  merchandise  to  China  and 
Hong-Kong  to  the  value  of  $41,813,052;  showing  an  increase  for  the 
last  eleven  years  of  our  sales  to  China  of  $6,077,379.  Now  let  us  take 
an  account  of  stock  and  see  what  we  have  made.  First,  we  have  paid 
a  subsidy  out  of  the  Treasury  of  five  millions  of  dollars,  and  bought 
seventy-five  millions  of  dollars  extra  of  the  products  of  the  Chinese ; 
and  in  return  the  Chinese,  in  eleven  years,  have  bought  six  millions  of 
dollars  extra  of  our  goods. 

I  wish  some  worthy  brother  legislator,  who  is  in  favor  of  a  subsidy, 
the  old  flag,  and  an  appropriation,  would  tell  us  how  long  it  would  take 
us  at  this  rate  to  become  the  wealthiest  nation  in  the  world?  We 
started  out  to  take  the  Chinese.  Result :  the  Chinese  have  taken  us, 
and  the  Pacific  Mail  Steamship  Company  has  taken  the  five  millions  of 
dollars. 

But  this  is  not  all.  The  trade  with  Japan  was  to  be  secured  by  this 
subsidy.  That  trade  has  been  entirely  built  up  in  the  last  43  years. 
The  result  is  we  have  purchased  of  the  Japanese  in  that  time  merchan¬ 
dise  to  the  value  of  $76,595,647,  and  have  sold  to  them  only  $11,126,305. 
Thus  it  will  be  seen  that  the  five  millions  of  dollars  levied  upon  the 
industries  of  the  country  to  pay  this  subsidy,  so  far  as  benefiting  the 
country  was  concerned,  was  absolutely  thrown  away. 

FORMER  SUBSIDIES  PAID  BY  THE  UNITED  STATES. 

The  proposed  legislation  is  by  no  means  a  new  experiment  in  this 
couutry.  My  colleague  on  the  committee,  Mr.  Freeman,  addressed  a 
letter  to  the  Postmaster-General  touching  prior  legislation  and  received 
an  answer  as  follows  : 


Post-Office  Department, 

Office  of  Foreign  Mails, 
Washington,  D.  C.,  February  20,  1878. 

Sir:  I  have  the  honor  to  inform  you,  in  answer  to  your  letter  of  this  date,  that  the 
following  is  the  statement  of  subsidies  j)aid  to  different  steamship  lines  since  the  year 
1847,  for  translating  the  United  States  mails  to  and  from  foreign  ports  under  the  pro¬ 
visions  of  special  acts  of  Congress,  which  was  furnished  to  the  Hon.  T.  W.  Ferry,  chair¬ 
man,  &c.,  under  date  of  the  15th  instant. 

1.  A  monthly  service  between  New  York  and  Bremerhaven,  Germany,  via  Southamp¬ 
ton,  England  (distance  3,700  miles),  at  an  annual  pay  of  $200,000,  agreeably  to  act  of 
March  3,  1845. 

2.  A  semi-monthly  service  between  Charleston,  S.  C.,  and  Havana,  Cuba,  via  Savan¬ 
nah,  Ga.,  and  Key  West,  Fla.  (distance  669  miles),  at  an  annual  pay  of  $50,000,  agree¬ 
ably  to  acts  of  March  3,  1847,  and  July  10,  1848. 

3.  A  semi-monthly  service  between  New  York  and  Aspinwall,  New  Granada,  direct 
(distance  2,000  miles) ;  between  New  York  and  New  Orleans  via  Havana  (distance  2,000 
miles) ;  and  betweeu  Havana  and  Aspinwall  (distance  1,200  miles),  at  an  annual  pay 
of  $290,000,  agreeably  to  acts  of  March  3,  1847,  and  March  3,  1851. 

4.  A  semi-monthly  service  between  Astoria,  Oregon,  and  Panama,  New  Granada, 
via  San  Francisco,  Cal.  (distance  4,200  miles),  at  an  annual  pay  of  $348,250,  agreeably 
to  acts  of  March  3,  1847,  and  March  3,  1851. 

5.  For  26  round-trips  a  year  between  New  York  and  Liverpool,  England,  Collins 
line  (distance  3,100  miles),  at  an  annual  pay  of  $858,000,  agreeably  to  acts  of  March  3. 
1847,  and  July  21,  1852. 


8 


OCEAN  MAIL  STEAMSHIP  SERVICE. 


6.  A  monthly  service  between  New  York  and  Havre,  France,  via  Cowes,  England 
(distance  3,270  miles),  at  an  annual  pay  of  $150,000,  agreeably  to  act  of  March  3,  1847. 

7.  A  monthly  service  between  New  York  and  Rio  de  Janeiro,  Brazil,  touching  at 
Para,  Pernambuco,  and  Bahia,  Brazil  (distance  not  stated),  at  an  annual  pay  of 
$150,000,  agreeably  to  act  of  May  28,  1864. 

8.  A  monthlv  service  between  San  Francisco  and  Honolulu,  Hawaiian  Islands  (dis¬ 
tance  not  stated),  at  an  annual  pay  of  $75,000,  agreeably  to  act  of  March  2,  1867. 

9.  A  monthly  service  between  San  Francisco  and  Hong-Kong,  China,  via  Yokohama, 
Japan  (distance  7,050  miles),  at  an  annual  pay  of  $500,000,  agreeably  to  acts  of  Feb¬ 
ruary  17,  1865,  and  February  18,  1867. 

At  present  all  the  United  States  ocean  mail  steamship  service  is  being  performed 
under  the  provisions  of  the  general  law,  which  allows,  as  full  compensation  for  the 
service,  the  amount  of  sea-postage  on  the  mail  conveyed. 

I  am,  very  respectfully,  your  obedient  servant, 


D.  M.  KEY, 
Postmaster-General. 


Hon.  Chapman  Freeman, 

House  of  Representatives. 


From  which  it  appears  that  subsidies  for  the  promotion  of  ocean  com¬ 
merce  were  larger  and  more  frequently  granted  while  the  Democratic 
party  was  in  power,  although  the  example  was  followed  while  the  Re¬ 
publican  party  was  in  power;  but  from  the  beginning  to  the  present 
these  grants  have  not  resulted  in  the  permanent  establishment  of  steam¬ 
ship  service,  but  were  a  burthen  upon  the  tax  payer  without  any  ade¬ 
quate  return. 


OUR  TRADE  WITH  FOREIGN  COUNTRIES;  ITS  AMOUNT,  WITH  WHAT 
COUNTRIES,  AND  OF  WHAT  IT  CONSISTS. 

Having  inquired  why  Brazil,  Japan,  and  China  are  not  good  custom¬ 
ers  for  the  manufactured  articles  of  the  United  States,  I  will  state 
briefly  the  amount  of  our  trade  with  other  foreign  countries  and  of  what 
it  consists.  The  following  statement  made  by  the  Chief  of  the  Bureau 
of  Statistics  shows  the  imports  from  and  the  gross  exports  of  merchan¬ 
dise  to  foreign  countries  for  the  year  ending  June  30, 1877,  by  countries 
and  their  dependencies,  grouped  together. 


OCEAN  MAIL  STEAMSHIP  SERVICE, 


9 


Statement  showing  the  imports  from  and  the  gross  exports  of  merchandise  to  foreign  coun¬ 
tries,  with  the  excess  of  exports,  for  the  year  ended  June  3i^  1877. 


Countries. 


Austria . 

Belgium . . 

Chili . 

Denmark  and  dependencies : 

Denmark,  Greenland,  Iceland,  and. the  Faroe  Islands . 

Danish  West  Indies . 

France  and  dependencies : 

Miquelon,  Langley,  and  St.  Pierre  Islands . 

French  Possessions,  all  other,  including,  &c . 

Germany . 

Great  Britain  and  dependencies  : 

England . 

Scotland . 

Ireland . 

Gibraltar  . 

Nova  Scotia,  New  Brunswick,  and  Prince  Edward  Island  . . 

Quebec,  Ontario,  Manitoba,  &c . 

British  Columbia . 

Newfoundland  and  Labrador . 

British  Possessions  in  Africa  and  adjacent  islands . 

British  Possessions  in  Australasia . 

Hayti . . 

Italy . 

Liberia . 

Mexico .  . 

Netherlands  and  dependencies : 

Netherlands . 

Dutch  West  Indies  and  Dutch  Guiana . 

Portugal  and  dependencies  : 

Portugal . 

Azore,  Madeira,  and  Cape  Verde  Islands . 

Portugal  Possessions  in  Africa . 

Russia  on  the  Baltic . 

San  Domingo . 

Spain  and  dependencies : 

Spain . 

Sweden  and  Norway . 

Turkey  and  dependencies : 

Turkey  in  Europe .  . 

Turkey  in  Asia . 

Turkey  in  Africa  . 

All  other  countries  in  Africa . . . 

All  other  islands  and  ports,  not  elsewhere  specified . 

Total . 


Imports 

from. 

Domestic 
and  foreign 
exports  to. 

Excess  of 
exports 
over  im¬ 
ports. 

Gold  values. 
$414,  020 
5,  079, 149 
689,  368 

Mixed  values. 
$2,  668,  546 
18,  832,  059 
2,  227,  551 

$2,  254,  526 
13,  752,910 
1,  538, 183 

146, 618 
284,  480 

3,  329,  725 
750,  256 

3, 183,  207 
465,  776 

90 

167,  392 
32,  509,  365 

304,  526 
672,  086 
58, 107,  433 

304,  436 
504,  694 
25,  598,  068 

104,  912,  296 
7,  771,  694 
1,  050,  268 
46,  934  ! 
3,  701,  381 
19,  728,  652 
734,  722 
112,  623 
1,  016,  542 
1,476,238  ] 
*  2,  779,  410  j 
7, 105,  230 
57,  470 

5,  204,  264 

288,  269,  637 
21,  103,  262 
36,  588, 156 

2,  566,  446 
6,  562,  571 

29,  612,  710 
1,243,  034 
1.955,  865 

1,  398,  361 

5,  885,  467 

3,  879,  230 

8,  494,  668 

124,  680 

5,  893,  494 

183,  357,  341 
13,  331,  568 
35,  537,  888 
2,  519,  512 
2,  861, 190 
9,  884,  058 
508,  312 
•  1,  843,242 
381,819 
4,  409, 229 
1,  099,  820 
1,  389,  438 
67,  210 
689,  230 

2,  547, 119 
690,  694 

10,  568,  335 
984,  630 

8,  021,216 
293,  936 

524,  826 
78,  514 

2,  380,  764 
415,  275 
37,  640 

4,  258,  344 
687,  244 

1,  855,  938 
336,  761 
37,  640 
3,  848, 147 
168,  078 

410,  197 
519,  166 

3,  280,  836 
243,  562 

10,  473,  476 

3,  056,  769 

7, 192,  640 
2,  813,  207 

46,  714 
235,  882 
146,  421 
378,  264 

8,  344,  522 
516,  330 
477,  649 
832,  024 
71,713 

8,  297,  808 
280,  448 
331,  228 
453,  760 
71,  713 

204,  090,  301 

543,  574,  478 

339,  484,  177 

10 


OCEAN  MAIL  STEAMSHIP  SERVICE. 


Statement  showing  merchandise  imports  from  and  gross  merchandise  exports  to  foreign  coun¬ 
tries ,  ivith  excess  of  imports,  for  the  year  ended  June  30, 1877. 


Countries. 


Argentine  Eepublic . 

Brazil . 

Central  American  States . 

China . 

France  and  dependencies : 

France . 

French  West  Indies . . 

Great  Britain  and  dependencies : 

British  West  Indies.  British  Honduras,  and  British  Guiana. 

Hong-Kong  and  British  East  Indies . 

British  Possessions,  all  other,  not  elsewhere  specified . 

Greece . 

Hawaiian  Islands  . . . 

Japan  . 

Netherlands  and  dependencies : 

Dutch  East  Indies . 

Peru . 

Bussia  on  the  Black  Sea  and  Asiatic  Eussia . 

Spain  and  dependencies : 

Cuba . 

Porto  Bico . 

Spanish  Possessions  in  Africa . 

Spanish  Possessions,  all  other,  not  elsewhere  specified . 

United  States  of  Colombia . 

Uruguay . 

Venezuela . 

All  other  countries  in  South  America, not  elsewhere  specified 

Total . 


Imports 

from. 

D  om  estic 
and  foreign 
exports  to. 

Excess  of 
imports 
over  ex¬ 
ports. 

Gold  values. 
$3,  449,  309 
43,  498,  041 

2,  678,  672 
11, 130,  495 

Mixed  values. 
$1,  22tf,  782 
7,  581,  813 
960,  730 
1,  707,  872 

$2,  222,  527 
35,  916,  228 
1,  717.  942 
9,  422,  623 

47,  556, 292 
2,  322,  653 

45, 139,  918 

1,  407,  578 

2,  416,  374 
915,  075 

9,  729,  987 
11,  896,  808 
103,  297 
523, 128 
2,  550,  335 
13,  687,  061 

9,  603,  035 
4,  095,  474 
52,  909 
196,  628 
1,  272,  949 

1,  252,  346 

126,  95a 
7,  801,  334 
50,  388 
326,  500 
1,277,  386 
12,  434,  715 

4,  511,214 
1,  479,  511 
208,  337 

2,  667,  893 

1,  300,  552 
166,  086 

1,  843,  321 
178,  959 
42,  251 

65,  828,  395 

4,  405,  752 
184, 573 

7,  182,  284 

5,  023,  326 
2, 195,  278 
7,  000,  801 

87.  276 

13,  371,  578 

2,  089,  585 
107, 193 
74,  828 
4,  020,  909 
1,  100,  387 
2,814,  041 
286 

52,  456,  817 
2,  316, 167 
77,  380 
7, 107,  456 
1,002,  417 
1,  094,  891 
4, 186,  760 
86,  990- 

247,  232,  825 

102,211,372 

145,  021,  453 

Bureau  of  Statistics, 

February  18, 1878. 


EDWABD  YOUNG. 
Chief  -of  Bureau  of  Statistics. 


From  which  it  appears  that  we  bought  for  the  year  1877 — 


Of  foreign  countries  merchandise  to  the  value  of .  $451,  323, 12& 

And  we  sold  to  foreign  countries  merchandise  to  the  value  of .  045,  785,  850 

Showing  that  we  sold  more  than  we  bought  (merchandise) .  194,462,724 

Of  this  we  sold — 

To  Great  Britain  and  her  dependencies  merchandise  to  the  value  of .  $403, 164, 183 

And  we  bought  of  Great  Britain  and  her  dependencies .  162, 281,  44£ 


Showing  a  balance  of  trade  in  our  favor  with  that  government  and  its 
dependencies  alone  of .  240,882,741 


Largely  more  than  two-thirds  of  our  total  sales  were  to  Great  Britain, 
while  only  slightly  over  one-third  of  our  purchases  were  made  from  that 
country.  Our  sales  to  her  consisted  principally  of  cotton,  breadstuff's, 
and  provisions,  that  which  we  produced  at  a  profit  and  without  subsidy. 
And  here  let  me  remark  that  a  great  many  lines  of  steamers  ply  between 
the  United  States  and  Great  Britain ;  but  while  the  contrary  is  fre¬ 
quently  stated,  Great  Britain  does  not  pay  one  cent  of  subsidy,  directly 
or  indirectly,  to  any  ship  plying  between  the  United  States  and  that 
country.  This  trade  is  purely  for  the  reason  that  it  is  to  her  interest  to 
buy  our  cotton,  breadstuff's,  and  provisions,  which  we  can  sell  cheaper 
than  she  can  buy  elsewhere. 

Our  trade  for  same  year  wTas,  in  round  numbers,  with — 


Germany: 

Exports . , . $58,  000,  000 

Imports .  32,  000,  000 


Balance  in  our  favor .  26,  000, 000 


OCEAN  MAIL  STEAMSHIP  SERVICE. 


11 


Belgium : 

Exports .  $19,  000,  000 

Imports . - .  5,  U00,  000 


Balance  in  our  favor .  14,  000, 000 

France : 

Imports . - .  50,  000,  000 

Exports .  46, 500,  000 


Balance  agaiDst  us .  3, 500,  000 


Notice  the  large  trade  between  the  United  States  and  Great  Britain, 
notwithstanding  neither  one  of  the  governments  is  paying  subsidies 
to  ocean  steam  or  sail  service  between  the  two  countries  ;  and  the  small 
trade  in  comparison  we  have  with  France,  while  that  nation  pays  a  sub¬ 
sidy  to  a  line  of  steamers  plying  between  Havre  and  the  United  States 
of  $729,000  per  annum. 

As  I  am  discussing  the  proposition  to  subsidize  steamship  lines  from 
the  United  States  to  Brazil,  it  is  proper  for  me  to  state — 

THE  SUBSIDIES  BESTOWED  BY  OTHER  GOVERNMENTS  UPON  STEAM¬ 
SHIP  LINES  TO  BRAZIL  AND  ELSEWHERE. 

I  do  so  because  of  the  many  glaring  errors  touching  the  same  in  the 
report  of  the  majority  of  the  committee.  The  committee,  members  of 
Congress,  and  the  country  have  been  deluged  with  pamphlets,  ex-parte 
statements,  &c.,  purporting  to  give  data  and  facts  touching  these  mat¬ 
ters,  which  are  not  only  full  of  errors,  but  in  many  instances  totally 
unreliable,  and  I  am  driven  to  the  conclusion  that  the  majority  of  the 
committee,  without  thorough  investigation,  have  relied  to  a  great  degree 
upon  such  statements  for  information.  On  the  28th  day  of  January 
last,  in  compliance  with  a  resolution  of  the  House,  which  I  had  the 
honor  to  introduce,  the  Postmaster-General  transmitted  to  the  House 
a  tabular  statement  of  the  ocean  mail-steamship  service  of  foreign 
countries,  compiled  from  official  data  in  the  office  of  foreign  mails  of 
his  department,  which  was  printed  by  the  order  of  the  House  as  Ex. 
Doc.  No.  38,  and  which  document,  so  far  as  it  is  necessary  to  this  report, 
I  annex  as  an  appendix,  marked  A. 

Desiring  to  utilize  the  same  so  it  could  be  determined  at  a  glance 
the  amount  of  subsidies  paid  the  companies  therein  specified  for  each 
mile  of  service  performed  by  them  respectively,  I  referred  it  to  the 
Secretary  of  the  Navy,  with  a  request  that  he  give  me  the  distances 
between  ports  and  countries  therein  mentioned,  with  other  information 
indicated.  His  reply  I  make  a  part  of  this  report,  as  Appendix  B,  from 
which  it  appears  that  the  only  country  in  the  world  that  now  subsidizes 
a  steamship  line  to  Brazil  is  Belgium.  Belgium  pays  ten  cents  a  mile 
the  round  trip  from  Antwerp  to  Brazil  and  La  Plata,  tri-monthly  service. 
France  pays  no  subsidy  to  Brazil,  but  does  pay  $1.61  a  mile  for  round- 
trip  monthly  service  from  Bordeaux  to  Buenos  Ayres  direct,  while 
Great  Britain  and  Germany  pay  sea  postages  only  for  mail  service,  and 
but  slightly  in  excess  of  the  amount  the  United  States  pays  to  American 
vessels  for  mail  service,  while  Italy,  for  service  monthly  from  Genoa  to 
Buenos  Ayres,  pays  less  sea-postage  than  we  do  to  American  vessels. 
Yet,  in  the  face  of  this  official  information,  the  majority  of  the  commit¬ 
tee,  by  their  report,  inform  the  House,  to  quote  from  it  literally,  that 
“  England  pays  her  lines  about  three  dollars  per  mile,  and  France  pays 
hers  over  seven  dollars  per  mile,  for  every  mile  traveled  for  trans- 


12 


OCEAN  MAIL  STEAMSHIP  SERVICE. 


porting  tbe  mail  to  Brazil .”  The  official  data  upon  the  one  hand  and 
the  assertion  upon  the  other  require  no  comment. 

The  majority  place  great  stress  upon  the  subsidies  paid  by  Great 
Britain  to  her  steamship  service,  yet  the  official  data  shows  that  the 
total  amount  of  subsidies,  other  than  ordinary  sea-postages,  paid  aunu- 
ally  by  her  at  this  time  is  $2,694,000,  and  over  $2,000,000  of  this  is  for 
service  on  the  Mediterranean  and  to  her  East  Indian  possessions,  and 
where  she  pays  subsidies  she  does  not  pay  sea-postages. 

The  majority  of  the  committee  state  that  “  Europe  has  200  steamships 
running  to  and  from  the  United  States.”  Yet  the  official  data  shows 
that  all  these  steamers  only  receive  ordinary  sea  postages  for  mail  serv¬ 
ice,  except  from  Belgium,  which  pays  thirty  cents  a  mile  the  round  trip 
for  service  between  Antwerp  and  New  York  and  Philadelphia  (only  four 
steamers  required).  And  France  pays  to  one  line — Havre  to  New  York — 
$2.80  per  mile,  only  six  steamers  required ;  the  other  190  steamers  are 
operated  without  subsidy. 

I  give  the  total  amount  of  subsidies  paid  by  different  countries,  other 
than  sea-postage  for  mail  service  : 


Austria,  annually,  not  to  exceed .  $340,  G67 

Belgium,  total,  not  to  exceed .  175,  000 

Denmark,  total .  18,495 

France . . .  4,  677, 778 

Great  Britain . . .  2,  694, 000 

Italy,  not  to  exceed . . .  1,  564, 505 

Japan,  total .  250,000 

Netherlands,  total .  44,800 

Portugal .  100.  000 

Germauy,  for  service  on  the  Baltic .  54,000 


These  subsidies  are  paid  only  to  a  few  lines.  The  great  bulk  of  the 
steamship  service  of  the  world  is  wholly  without  subsidy,  and  I  am 
glad  to  state  that  other  countries  are  rapidly  adopting  the  present  prac¬ 
tice  of  the  United  States,  i.  e.,  paying  a  reasonable  sea-postage  for  the 
mails  actually  carried  and  no  more  :  for  all  cost  of  production,  including 
transportation,  has  in  the  end  to  be  paid  by  the  consumer,  and  it  is 
much  better  to  let  all  persons  compete  for  the  ocean-trade  upon  equal 
footing  than  at  the  general  expense  to  give  the  favorite  or  importunate 
few  a  bonus  that  either  destroys  fair  competition  or  places  in  their  pock¬ 
ets  money  without  an  equivalent. 

EXPENSE  OF  CARRYING  OUR  FOREIGN  MAILS. 

The  majority  of  the  committee  in  their  report  tell  us  that  it  is  estimated 
that  the  United  States  now  pays  foreign  ship-owners  yearly  for  carry¬ 
ing  passengers,  goods,  and  mails  about  $50,000,000. 

The  report  of  the  majority  is  admirably  drawn,  abounds  in  beautiful 
imagery  and  magnificent  assertion,  but  its  chief  merit  is  its  beauty. 
Certainly,  its  statement  of  fact  aud  correctness  of  conclusion  cannot  be 
relied  upon.  The  Chief  of  Bureau  of  Statistics  informs  me  that  our 
total  exports  and  imports  from  the  United  States  last  year  amounted  to 
$1,096,000,000.  He  estimates  that  the  freight  on  this  amount  would  be 
6  per  cent.,  or,  $66,000,000. 

We  cannot  hope  under  the  most  favorable  circumstances  to  carry 
more  than  one-half  of  the  total  exports  and  imports,  aud  one-half  would 
have  yielded  freight  money  to  amount  of  $33,000,000. 

We  carried,  in  fact,  in  American  vessels,  freight,  $14,500,000  ;  balance 
we  should  have  carried  to  place  our  merchant  marine  on  equal  footiug 


OCEAN  MAIL  STEAMSHIP  SERVICE. 


13 


with  the  rest  of  the  world,  $18,500;  so  the  majority  of  the  committee  in 
fixing  it  at  $50,000,000,  only  miss  it  by  $31,500,000.  Another  proof 
that  the  beautilul  is  not  always  true. 

And  as  to  the  amount  it  costs  this  government  to  carry  the  mails  to 
Europe,  I  will  quote  from  the  Postmaster-GeneraPs  Report  for  1877  as 
follows,  .page  10: 

The  total  weights  of  the  mails  dispatched  from  the  United  Stales  to  the  postal- 
union  countries  during  the  year  were  as  follows:  Letters,  91,401,230  grams,  equal  to 
3,224,427  ounces;  printed  matter  and  samples,  377,260,364  grams,  equal  to  13,308,887 
ounces;  being  an  increased  w  eight  over  1876  of  74,518  ounces  of  letters,  and  1,209,205 
ounces  of  priuted  matter  and  samples.  A  statement  is  appended  of  the  weight  of  mails 
dispatched  to  each  postal-union  country. 

The  cost  of  the  United  States  transatlantic  mail-steamship  service  for  the  year  1877 
was  $159,742.47,  being  a  reduction  of  $12,600.61  from  the  cost  of  the  same  service  for 
the  year  1876. 

And  the  same  report  shows  that  the  mails  were  transported  for  this 
sum  for  514  trips  from  ports  in  this  country  to  principal  ports  iu 
Europe.  It  is  also  true  that  the  government  collected  more  postage  on 
the  mail  carried  than  it  paid  for  the  carriage. 

It  is  claimed  that  liberal  subsidies  to  ocean  steamship  service  would 
enable  citizens  of  the  United  States  to  earn  ocean-freights,  thereby 
contributing  to  the  general  prosperity,  and  having  the  money  earned 
come  to  the  Unfted  States  instead  of  go  to  other  countries.  If  the 
freight  amount  to  as  much  as  it  costs  to  earn  it,  the  business  would  give 
employment  to  a  number  of  our  citizens;  but  I  have  before  shown  that 
the  wages  for  labor  in  this  country  is  higher  than  in  Europe,  and  we 
cannot  protect  labor  beyond  our  own  borders,  as  it  comes  in  contact 
with  cheaper  labor  from  abroad.  It  was  in  proof  before  the  committee 
that  it  costs  25  per  cent,  more  for  labor  to  man  an  American  than  it  does 
a  foreign  steamer ;  so,  if  we  subsidize  at  all,  the  subsidy,  to  be  effective, 
must  equal  that  given  to  the  foreign  steamer  and  the  25  per  cent,  greater 
wage  our  sailors  receive  over  the  wage  of  sailors  employed  in  the  for¬ 
eign  steamer  with  which  theycompete  for  business — a  proposition  to  tax 
the  many  for  the  benefit  of  the  few  that  cannot  receive  my  approval. 

The  Chief  of  the  Bureau  of  Statistics  estimates  the  indebtedness  of 
the  United  States  held  abroad,  national,  State,  municipal,  and  corporative 
at  $1,200,000,000,  the  annual  interest  on  which  is  $60,000,000,  which 
large  sum  goes  abroad  annually.  At  least,  let  us  first  get  rid  of  this 
debt  abroad,  which  is  a  constant  drain  upon  the  resources  of  the  coun¬ 
try  and  its  citizens  before  gentlemen  grow  furious  to  tax  the  very  people 
who  are  bearing  this  great  burden  to  pay  a  bonus  for  the  purposes  indi¬ 
cated. 

It  appeared  from  the  statement  of  Mr.  Welsh,  president  of  the  Amer¬ 
ican  Steamship  Company,  which  operates  a  weekly  line  from  Philadel¬ 
phia  to  Liverpool,  that  his  company  commenced  the  service  five  years 
ago,  which  has  been  performed  by  four  steamers  of  3,000  tons  each, 
American  built,  under  the  American  flag,  and  two  foreign-built  steam¬ 
ers,  under  the  British  flag;  that  the  American  steamers  cost  25  per 
cent,  more,  amounting  to,  say,  $600,000,  than  like  steamers  could  have 
been  purchased  for  abroad.  Under  the  law  of  the  United  States,  no 
ship  can  have  an  American  register  unless  it  was  built  in  this  country. 

The  American  Steamship  Company  has  to  compete  for  trade  on  the 
ocean  with  the  foreign-built  cheaper  ships  and  cheaper  navigators,  and 
for  this  reason  the  company,  to  make  its  weekly  service,  used  two  for¬ 
eign-built  ships.  Is  it  strange  that  under  these  circumstances  the 
American  Steamship  Company  lost  money,  especially  when  it  ap¬ 
pears  from  statements  before  the  committee  that  the  competition 


14 


OCEAN  MAIL  STEAMSHIP  SERVICE. 


has  been  so  great  for  the  ocean-carrying  trade  for  some  years  past 
that  all  steamship  lines  in  the  trade  between  the  United  States  and 
Europe  have  lost  money?  Mr.  Welsh  was  of  opiuion  that  an  an¬ 
nual  subsidy  of  $325,000  for  ten  years  would  enable  his  company  to 
continue  the  service,  and  be  permanently  established ;  others  not  so 
sanguine  thought  it  would  require  that  annual  amount  for  twenty  years. 
Mr.  Welsh  also  stated  that  marine  risks  on  his  ships  cost  8  per  cent, 
premium  in  American  insurance  companies,  while  the  premium  was  5 
per  cent,  in  English  companies,  and  the  reason  assigned  for  the  differ¬ 
ence  in  premium  was  that  in  Great  Britain  the  accumulations  of  capital 
were  much  larger  and  the  rates  of  interest  much  smaller  than  in  the 
United  States,  therefore,  British  companies  could  afford  to  take  risks 
at  a  less  premium. 

I  submit  that  all  arguments  which  apply  to  the  subsidization  of  steam¬ 
ship  lines  apply  to  the  subsidization  of  insurance  companies  engaged  in 
taking  marine  risks,  yet  who  is  bold  enough  to  advocate  a  grant  of  sub¬ 
sidy  to  an  insurance  company? 

In  justice  to  Mr.  Roach  who  appeared  before  the  the  committee,  I  state 
that  he  claims,  quality  considered,  he  can  build  steamships  on  the  Dela¬ 
ware  as  cheaply  as  they  can  be  built  on  the  Clyde.  I  am  satisfied  he 
is  too  sanguine.  If  correct,  why  does  he  not  build  them  ?  For  the 
American  ship  builder  has  an  exclusive  market  in  the  United  States  and 
free  sale  in  all  other  markets  of  the  world.  Again,  if  he  is  correct,  why 
does  the  proposition  to  give  an  American  register  to  foreign-built  ships 
meet  with  such  a  storm  of  opposition  whenever  it  is  suggested  ? 

In  conclusion,  I  submit  the  bill  recommended  by  the  majority  of  the 
committee  should  not  pass.  Mr.  Roach  informed  the  committee  that 
he  is  under  contract  with  the  Brazilian  Government  to  run  a  monthly 
line  of  steamers  of  the  kind  specified  in  the  bill  for  ten  years  between 
New  York  and  Rio  de  Janeiro.  It  is  fair  to  state,  however,  that  he 
claimed,  while  he  would  commence  the  service,  that  he  could  not  con¬ 
tinue  it  without  the  subsidy  recommended  by  the  majority  of  the  com¬ 
mittee.  If  the  bill  passes,  it  is  practically  giving  the  subsidy  to  him  for 
the  service  he  is  already  under  contract  to  perform,  for  no  other  person 
is  in  condition  to  furnish  the  American-built  steamers  by  the  time  the 
contract  is  to  commence.  If  there  is  not  carrying  sufficient  to  support 
one  steamship  line  without  a  subsidy  from  New  York  to  Rio,  will  some 
one  skilled  in  mathematics  and  finances  explain  how  an  additional  line 
from  New  Orleans  to  Rio  can  be  operated  at  a  profit?  Is  it  just  or 
politic  to  drive  from  the  Brazilian  trade  the  less  expensive  and  more 
cheaply-navigated  sailing-vessels  which  are  doing  a  profitable  business, 
and  tax  them  in  common  with  all  the  rest  of  the  country  to  pay  a  sub¬ 
sidy  for  their  own  destruction  ?  If  a  line  of  steamers  is  to  be  subsidized 
at  all,  only  one  line  should  be  subsidized  to  Brazil,  at  least  until  that 
line  is  self-sustaining. 

The  bill  is  artfully  conceived  to  get  votes  from  the  East  and  North 
on  account  of  the  line  from  New  York  to  Rio,  and  from  the  South  and . 
West  on  account  of  the  line  from  New  Orleans  to  Rio,  and  from  Texas 
by  a  provision  that  the  New  Orleans  line  shall  go  out  of  its  way  and 
touch  at  Galveston  both  going  and  coming,  notwithstanding  the  steam¬ 
ers  provided  by  the  bill  draw  20  feet,  and  at  the  entrance  to  the  port  of 
Galveston  there  is  only  14  feet  of  water.  Still  I  do  not  believe  the  House, 
on  discussion,  will  pass  the  bill,  or  that  the  country  will  approve  it. 

In  my  opinion  this  legislation  would  be  pernicious  rather  than  bene¬ 
ficial  in  its  effect.  It  would  be  a  weight  upon  legitimate  commerce 
rather  than  a  benefit.  It  is  a  proposition,  in  effect,  to  give  a  bonus  to 


OCEAN  MAIL  STEAMSHIP  SERVICE. 


15 


assist  certain  persons  to  make  a  sale  of  steamships  at  a  price  greater 
than  their  value  in  the  markets  of  the  world.  Its  passage  would  be  an 
encouragement  to  the  lobby. 

It  would  encourage  individuals  to  knock  at  the  doors  of  Congress  for 
profit  at  the  general  expense  instead  of  entering  the  legitimate  avenues 
of  trade,  and  by  skill,  industry,  and  economy  make  a  legitimate  profit. 
The  Almighty  has  furnished  the  great  highway  for  nations  and  keeps 
it  in  repair. 

The  United  States  should  afford  protection  to  the  person  and  property 
of  the  citizen  wherever  lie  may  be  upon  the  globe ;  we  should,  at  the 
general  expense,  build  light-houses  and  improve  our  harbors  ;  we  should 
make  wise  commercial  treaties  with  other  nations.  Then  our  commerce 
on  the  ocean,  if  unfettered  by  legislation,  can  safely  be  left  to  private 
enterprise. 

I  dissent  from  the  recommendations  of  the  majority  of  the  committee, 
and  recommend  that  the  bill  reported  do  lie  upon  the  table. 

J.  G.  CANMXTU 


APPENDIX  A. 

OCEAN  MAIL  STEAMSHIP  SERVICE  OF  FOREIGN  COUNTRIES. 

Letter  from  the  Postmaster-General,  in  compliance  with  a  resolution  of  the  House  of 
Representatives,  transmitting  a  tabular  statement  of  the  ocean  mail  steamship  serv¬ 
ice  of  foreign  countries. 

Post-Office  Department, 
Washington,  D.  C.,  January  *29,  1878. 

Sir:  I  have  the  honor  to  transmit  herewith,  in  compliance  with  the  resolution  of 
the  House  of  Representatives  of  the  25th  instant,  a  tabular  statement  of  the  ocean  mail 
steamship  services  of  foreigu  countries,  compiled  from  official  data  in  the  Office  of  For¬ 
eign  Mails  of  this  department,  which  comprises  all  the  information  in  the  possession  of 
this  department  relating  to  the  organized  ocean  mail  steamship  services  maintained  by 
foreign  governments. 

I  am,  very  respectfully,  your  obedient  servant,  , 

D.  M.  KEY, 
Postmaster- General. 

Hon.  Samuel  J.  Randall, 

Speaker  of  the  House  of  Representatives. 

o 


r* 


